The recent drop in variable home loan interest rates can see some customers saving up to $100 each month on mortgage payments ( dependant upon loan balance & interest rate) however there are other ways to maximise savings!

1.  Advance repay- use the savings to pay off debts sooner by making additional repayments on the mortgage or other debts.

2. Consolidate - amalgamate debts into one simple & easy loan facility. This could potentially reduce monthly repayments.

3. Budget - establish a budget for each pay period to plan on how to use your money. While ensuring savings for holdiadys or christmas.

4. Make it regular - set up a Direct Debit payment that co-insides a day after your pay period. This helps to ensure no late fees.

5. Plan & Research major purchases - investigate and compare prices on major purchases. The Internet may help you research.

6. Buy Pre-loved - purchasing preloved or second hand can save a great amount on money. For example according to www.buyingadvice.com a new vehicle will depreciate by 15-20% in the first year alone!

7. Invest in high interest savings

8. Use rewards card - use store rewards casrd to save money on groceries or petrol.

Courier Mail - 10th Nov 2008

THE banks must pass on the full reduction in official interest rates to business as soon as conditions in financial markets ease, a leading business lobby group says.

Mtge & Finance Brief Oct 2008

Chartered Accountant and registered tax agent Jo Kelab of australianbiz.com.au says income taxs laws on the provision of fringe benefits to employees, their associates and clients are complex, especially at Christmas.

Holding a Christmas party is fraught with tax requirements, so its best to run any ideas past your accountant. Again, it all get back to the planning. “Christmas parties consitute ‘entertainment benefits’ and as such are subject to fringe benefit tax (FBT) unless specifically exempt, or they are subject to the ‘minor benefits’ exemption,” explains Kaleb.

A minor benefit is one that is provided to an employee or their associate on an ‘infrequent’ or ‘irregular’ basis, which is not a reward for services, and the cost is less than $300 per benefit inclusive of GST”

He says holding the Christmas party on the business premises on a working day is usually the most tax effective, because expenses such as food & drink are exempt from FBT for employees with no dollar limit, but no tax deduction or GST credit can be claimed.

“Alternatively, Christmas parties held off the business premises are exempmt from FBT where the cost for the employee and their assocaite is each less than $300 inclusive of GST, bit no tax deduction or GST credit can be claimed.”

In regards to gifts, Kaleb says that non enterainment gifts provided to employees are usually exempt from FBT where the total value is less than $300 inclusive of GST. A tax deduction and GST credit can also be claimed. These include flowers, wine, perfumes, gift vouchers and hampers.”

Kaleb recommends keeping these tips in mind:

• Non Entertainment gifts given to clients and suppliers do not fall within the FBT rules as they are not provided to employees. Generally a tax deduction and GST credit can be claimed for these gifts, provided they are not excessive or overly valuable
• The provision of entertainment gifts has different tax implications ( examples include threatre tickets, passes to attend musical, live play, movie, tickets to a sporting event or providing a holiday) Where the cost for the employee and their associate is less than $300 each GST inlcusive, there is no FBT, no tax deduction is allowed and no GST redit can be claimed
• However, if the cost for the employee and their associate is each $300 or more GST inclusive, a tax deduction and GST credit can be claimed, but FBT is payable. The cost of any entertainment gifts provided to clients is not subject to FBT and no tax deductions olr GST credit can be claimed.

Peter Switzer

Mtge & Finance Brief 10/2008

Business needs to proactive about their obligations to close off 2008 and avoid any shortfalls in the new year.

As the end of the 2008 draws to a close, have you consider all your bases? SME’s need to plan ahead to close off the year and make sure they abide by all their obligations - the taxman - as well as keeping the business on a firm financial footing. This includes everything from cash flow over Christmas and the tax implications of employee gifts or Christmas bonuses, to things that can be easily overlooked, such as where your mail gets sents when you’re on holidays.

So Where to start?

A leading debt agency warns small business owners that Christmas is a time when cash crisis occurs, and that your better off being realistic than leaving your head in the sand and exposing yourself to a potential New Year Shortfall.

Roger Mendleson, CEO of Prushka, debt recovery experts, explains why Christmas can burn cash. “There is generally a heavy cash burden on small business, with Christmas pays, and reduced output amd billings/orders in the week leading up to Chjristmas’ says Mendelson. “Those businesses running tight before Xams are more likely to ‘fall over’ in February/March than in any other time of the year.”

The time left to head off a cash crunch before Christmas could be tight, but your New Years’s resolution has to be to get into cash & tax planning.

We’ve all been told that Christmas is the time to be merry, but it should also be the time to be well prepared. The Five Ps adage applies: perfect planning prevents poor performance.

Silly Season Strategies

The festive season comes upon us usally when we are dying for a break and a bit of lateral thinking makes smart business sense. The thinking should be applied to the all-important areas of customer service, staff management and supplier management.

The handling of this unsual buisiness experience should be easier if you have traded through or closed down over the holiday period before. However, that doesn’t mean you’ve done it right in the past.

You might not know if you lost business because the prospective client who rang on 2 January- when you took an extra day off because New Years fell on a Thursday- never ring back.

You never know who your ptoential clients are. Perhaps he was a customer worth $100,000 a year profit, and part of a network of past-past growth businesses. So he is out there referring business he finally went to, when you weren’t there!

The bottom line is that you have to plan for this period, of course, it means you need to have systems in place to handle not only the expected but also the un-expected.

Taking Care of business

Lets start with the closed down operation. It’s obvious this busines needs to tap into telecommunications options available. The reality is that anyone ringing up over the festive season is desparate for supplies or service. They could be in the biulding sector where supplies or services could be vital to honouring a contract.

It would be smart to consider emailing or mailing to current customers informaing them of the times you plan to close your business down. This is a courtesy call and its not only showing you are a caring supplier, but you are giving them an alert if they need to order more of your goods or services for Christmas.

Your Customers could be serviced by an’Out of Office’ automatic reply to emails, which remind customers and tells new ones when you are back on deck. A special answerng machine message should be planned to give dates for the break, emergency contact number if you really are into customer service, and you might even pay for a messages to be answered by a messaging service with real people.

Cover all the Bases

It wouldn’t hurt to pay a visit to a telecommunications expert to find out what options are available. Being time poor and being unwilling to talk to experts can make you poorer in money terms.

For those trading over the holiday period, assume nothing. Make sure crucial suppliers know what your expectations are and if need be get written undertakings that you’ll be recieving deliveries. This is the perfect time to make a list of the things that could go wrong and then ensure you have these vulnerable basis covered.

Planning Ahead

For staff, managing expectations is important. Many small firms have encountered problems with staff around festive period because of poor communication. It has also underlined the problem of not having a written contract between you and your staff.

Calling a meeting after informing everyone in writing about your Christmas trading plans is a good idea. Many employers & employees do not get their entitlements and responsiobilities. The mixture of public holidays, holiday leave loading and staff managing their families’ expectations means that you have inform your staff as early as possible about your trading plans. Addressing early give you plenty of time to arrange replacement if need be.

Failure to plan for this all important time might not only mean you lose customers, you could also loose staff! Wouldn’t that be a great start to the New Year?

If these recommendations have you thinking, well, think a little bit more. The difference between a good and bad business is often linked to the systems put into place to handle all sorts of situations.

An effective system developed to handle the holidays makes you and your business more proffessional and hopefully more profitable.